Synopsis: Paras Defence and Space Technologies Limited’s subsidiary signed an MoU with MPSeDC to build a greenfield advanced IC packaging OSAT facility in Madhya Pradesh, a major step towards entering India’s semiconductor manufacturing ecosystem. The proposed ₹6,200 crore project focuses on advanced semiconductor packaging and testing technologies.
India’s semiconductor industry is seeing unprecedented investment as the government builds a self-sufficient chip manufacturing ecosystem. Global semiconductor companies have led most announcements, but domestic players are also entering high-value semiconductor value chains. With its entry into advanced semiconductor packaging, Paras Defence has made one of its biggest diversification moves outside of defence.
Shares of Paras Defence and Space Technologies Limited were trading at Rs 1,216.3, down by 0.52 percent from the previous close of Rs 1,222.6. The stock opened at Rs 1,222.6 and struck an intraday high of Rs 1,244. The company currently has a market capitalisation of Rs 9,792 crore.
Subsidiary Signs MoU for ₹6,200 Crore Greenfield Facility
Paras Defence informed the exchanges that its subsidiary, Paras Semiconductors Private Limited, has signed a Memorandum of Understanding (MoU) with the Department of Science and Technology, Government of Madhya Pradesh, represented through the MP State Electronics Development Corporation (MPSEDC).
The agreement will see both sides working to establish a greenfield advanced IC packaging OSAT (Outsourced Semiconductor Assembly and Test) facility in the Indore-Ujjain region of Madhya Pradesh.
The proposed investment of approximately ₹6,200 crore highlights the company’s long-term commitment to building capabilities in India’s emerging semiconductor ecosystem.
Facility to Focus on Advanced Semiconductor Packaging
The proposed plant will not manufacture semiconductor wafers but will undertake some of the most advanced packaging and testing processes used in modern chip manufacturing.
According to the company, the facility will offer capabilities including 3D heterogeneous integration, 2.5D and 3D advanced packaging, hybrid bonding, ultra-high-density fan-out packaging, chiplet integration, wafer bumping, flip-chip assembly, semiconductor testing, and reliability services.
These technologies have become increasingly important as semiconductor companies move towards advanced chip architectures that require sophisticated packaging solutions to improve computing performance, power efficiency, and miniaturisation.
Semiconductor Entry Broadens Long-Term Growth Opportunity
The announcement represents a strategic diversification for Paras Defence beyond its traditional defence and space engineering business. The company chose OSAT, which assembles, packages, tests, and validates semiconductor chips before shipping, instead of capital-intensive semiconductor fabrication. As global semiconductor manufacturing shifts to advanced packaging technologies, this segment will become more important in the semiconductor value chain.
The investment also supports India’s goal of developing domestic semiconductor capabilities, reducing import dependence, and attracting high-value electronics manufacturing. If successful, the project could generate new long-term revenue and expand the company into one of the fastest-growing technology industries.
State Partnership Could Support Project Execution
The collaboration with MP State Electronics Development Corporation (MPSeDC) provides an institutional framework for developing the project in Madhya Pradesh. State government participation can play an important role in facilitating land availability, infrastructure support, policy assistance, and faster project execution. The selection of the Indore-Ujjain region also reflects Madhya Pradesh’s growing focus on attracting investments in electronics and semiconductor manufacturing.
At present, the announcement is limited to the signing of an MoU, and the company has not yet disclosed timelines regarding construction, commercial production, funding structure, or customer partnerships. These developments are likely to be key milestones as the project progresses.
Financial Highlights
The company delivered a strong finish to Q4 FY26, with revenue surging 58.3% YoY to ₹171 crore from ₹108 crore in Q4 FY25. The robust topline growth translated into improved profitability, as operating profit increased 53.6% YoY to ₹43 crore from ₹28 crore, while operating margin remained healthy at 25%.
At the bottom line, Profit Before Tax (PBT) jumped 77.8% YoY to ₹48 crore from ₹27 crore, while net profit rose 85.7% YoY to ₹39 crore from ₹21 crore. EPS also improved significantly to ₹4.27 from ₹2.45, reflecting strong earnings growth.
The company maintains a strong balance sheet with ROCE of 16.9%, ROE of 12.6%, a debt-to-equity ratio of just 0.04, and a current ratio of 3.23, supported by cash & cash equivalents of ₹119 crore and working capital of ₹476 crore, highlighting a healthy liquidity position.
The long-term growth trajectory also remains robust, with the company delivering a 5-year sales CAGR of 27% and a 5-year profit CAGR of 41%. Over the last three years, it has sustained the momentum with a sales CAGR of 29% and a profit CAGR of 34%, indicating consistent business expansion and earnings compounding.
Project Reinforces Paras Defence’s Technology Platform
The proposed semiconductor facility is strategically significant as it extends Paras Defence’s presence from defence electronics into advanced semiconductor infrastructure.
Advanced chip packaging is essential to the global semiconductor supply chain as demand for AI, electric vehicles, high-performance computing, aerospace, telecommunications, and defence electronics rises. Paras Defence is investing in this segment to capitalise on structural growth driven by strong policy support and rising domestic demand.
While the project will require substantial capital investment and execution over multiple years, it has the potential to transform the company’s technology portfolio beyond its traditional defence-focused operations.
Paras Defence and Space Technologies Limited is an Indian defence engineering company engaged in the design, development, manufacturing, and testing of defence and space engineering products. The company operates across defence electronics, defence optics, heavy engineering, and electromagnetic pulse protection solutions and is now expanding into semiconductor manufacturing through its subsidiary Paras Semiconductors Private Limited.
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